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We provide a unified discussion of the issues that confront negotiators of the next international climate agreement. We offer a novel proposal that entitles countries to discharge their treaty obligations by paying a “fine”. This escape clause provides cost insurance, simplifies the problem of enforcing compliance, and increases incentives to participate in the agreement. We explain why developed country obligations should rely on a cap and trade commitment rather than carbon taxes. A Central Bank maintains stability of carbon prices by defending a price ceiling and floor. An so-called intensity target is not a good alternative to an emissions cap. Modest trade restrictions, consistent with WTO law, will form an important part of the next agreement. Developed and developing countries have differentiated responsibilities. Developing countries do not adopt binding targets at the next round of negotiations, but they accept the principle of binding targets in the subsequent agreement, beginning in the early 2020s. Developed country participation relies on a reformed CDM and sectoral agreements that are financed by the sale of emissions permits.

Ecosystems influence climate through multiple pathways, primarily by changing the energy, water, and greenhouse-gas balance of the atmosphere. Consequently, efforts to mitigate climate change through modification of one pathway, as with carbon in the Kyoto Protocol, only partially address the issue of ecosystem–climate interactions. For example, the cooling of climate that results from carbon sequestration by plants may be partially offset by reduced land albedo, which increases solar energy absorption and warms the climate. The relative importance of these effects varies with spatial scale and latitude. We suggest that consideration of multiple interactions and feedbacks could lead to novel, potentially useful climate-mitigation strategies, including greenhouse-gas reductions primarily in industrialized nations, reduced desertification in arid zones, and reduced deforestation in the tropics. Each of these strategies has additional ecological and societal benefits. Assessing the effectiveness of these strategies requires a more quantitative understanding of the interactions among feedback processes, their consequences at local and global scales, and the teleconnections that link changes occurring in different regions.

The successor to the Kyoto Protocol should impose national ceilings on rich countries’ greenhouse gas emissions and promote voluntary abatement by developing countries. Our proposal gives signatories the option of exercising an escape clause that relaxes their requirement to abate. This feature helps to solve the participation and compliance problems that have weakened the Protocol. We support the use of carefully circumscribed trade restrictions in order to reduce the real or perceived problem of carbon leakage.

Nitrogen trifluoride (NF3) can be called the missing greenhouse gas: It is a synthetic chemical produced in industrial quantities; it is not included in the Kyoto basket of greenhouse gases or in national reporting under the United Nations Framework Convention on Climate Change (UNFCCC); and there are no observations documenting its atmospheric abundance. Current publications report a long lifetime of 740 yr and a global warming potential (GWP), which in the Kyoto basket is second only to SF6. We re-examine the atmospheric chemistry of NF3 and calculate a shorter lifetime of 550 yr, but still far beyond any societal time frames. With 2008 production equivalent to 67 million metric tons of CO2, NF3 has a potential greenhouse impact larger than that of the industrialized nations' emissions of PFCs or SF6, or even that of the world's largest coal-fired power plants. If released, annual production would increase the lower atmospheric abundance by 0.4 ppt, and it is urgent to document NF3 emissions through atmospheric observations.

This paper quantitatively assesses the economic implications of crediting carbon abatement from reduced deforestation for the emissions market in 2020 by linking a numerical equilibrium model of the global carbon market with a dynamic partial equilibrium model of the forestry sector. We find that integrating avoided deforestation in international emissions trading considerably decreases the costs of post-Kyoto climate policy -- even when accounting for conventional abatement options of developing countries under the CDM. At the same time, tropical rainforest regions receive substantial net revenues from exporting carbon-offset credits to the industrialized world. Moreover, reduced deforestation can increase environmental effectiveness by enabling industrialized countries to tighten their carbon constraints without increasing mitigation costs. Regarding uncertainties of this future carbon abatement option, we find both forestry transaction costs and deforestation base lines to play an important role for the post-Kyoto carbon market.

This paper considers the success of the Montreal Protocol on Substances that deplete the Ozone Layer in addressing an incompletely understood global environmental hazard under risk and uncertainty, and its implications for and interactions with other global environmental protection regimes, particularly the Kyoto Protocol. We illustrate a method for assessing joint impacts of projects and policies designed to reduce environmental damage in the absence of a coordinated legal and regulatory framework. Further, we note areas for improvements in coordination and efficiency across the treaties.

A reform to the Kyoto Protocol that allows signatories to pay a fine instead of meeting the target level of abatement would achieve three goals. First, it would defuse one U.S. objection to the agreement: the concern that the cost of achieving the target might turn out to be extremely high. Second, unlike other cost-reducing measures (such as trade in pollution permits) it would increase the equilibrium number of signatories in a non-cooperative participation game. Third, it would make it easier to force signatories to comply with their obligations. We study the participation game under an escape clause using both a Nash Equilibrium and the concept of a stable set when nations are “farsighted”. We compare our results to a prominent model of International Environmental Agreements (IEAs) which finds that the equilibrium size of an IEA tends to be small when the benefits of cooperation are large. We show that with an escape clause and a properly chosen level of fine, a large IEA can be formed even when the benefits of cooperation are large.

Awarding Certified Emission Reductions to Clean Development Mechanism (CDM) projects under the Kyoto Protocol involves comparing the actual emissions of the project to a counterfactual “baseline” emissions level. The baseline of a project is intended to represent the emissions that would have occurred in the absence of the project. Accordingly, there is a high degree of uncertainty in determining CDM baselines. In the years since the emergence of the CDM, scientific and political debates have occurred about how best to cut through this uncertainty and arrive at the fixed, quantitative figures necessary for the quantification and commodification of greenhouse gas emissions. My research explores the decision-making process by which practical quantifying conventions are adopted in order to narrow the operational realm of uncertainty. It focuses on the role of scientists and the use of scientific rhetoric in the negotiation process and also explores risk and the perceptions of risk held by a range of important actors. This exploratory paper is intended to serve as a springboard for future work by providing a description of the nature of the uncertainty in CDM baselines, and by exploring the ramifications of decision-making in the face of this uncertainty. It concludes with a list of future questions that probe the ways in which different actors may be expected to maneuver within this uncertainty.